Can Foot Locker, Inc. (FL) Regain its Footing? – Lululemon Athletica inc. (LULU), Under Armour Inc (UA)

Although Lululemon and Under Armour Inc (NYSE:UA) – which offer their own branded products – have far smaller retail footprints than either Foot Locker or Finish Line, their success has forced traditional athletic retailers to rethink their business models.

Source: Yahoo Finance, March 9.

The appeal of Lululemon is undeniable – remarkable past performance based on robust return on equity, high margins, no debt and a steadily declining P/E ratio that is reconciling with its share price. Under Armour Inc (NYSE:UA), which hasn’t been able to match the strength of Lululemon Athletica inc. (NASDAQ:LULU) over the past five years, remains a strong second choice for growth investors.

Meanwhile, Foot Locker is a steady, undervalued choice that has posted admirable price growth over the past three years, with a lower beta than its peers.

FL data by YCharts

The Foolish Bottom Line

Foot Locker is a fundamentally stable, growing stock. Although it lacks the high momentum appeal of Lululemon or Under Armour Inc (NYSE:UA), it is handily outperforming its closest industry peer, Finish Line.

As long as demand for athletic footwear and apparel rises – reflected in Nike and Adidas’ strong top and bottom line growth – then Foot Locker will be lifted as well, without being exposed to the performance of a single brand.

Last but not least, Foot Locker’s aggressive investments show that it is seriously addressing the importance of female shoppers, and the way both men and women shop at its stores.

The article Can Foot Locker Regain its Footing? originally appeared on Fool.com and is written by Leo Sun.

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